People I've been sweating out a lackluster start of the season here in the OKC, but last night Kevin Durant and Russell Westbrook both reported for duty big time. It was really the first game of the season where Durant was really the Durant everyone is expecting.

Just a great game. When the Thunder went on a 10-0 run late to take a 5 point lead, Durant totally took over the game and the arena went nuts. It is really cool to see how hard OKC has fallen for this team and this game (i.e. the NBA).

Thunder still really need a reliable 3rd scoring option though. Krstic & Harden have started to contribute, but they need a strong spot up shooter badly.

Friday, November 12, 2010

What about the Asian economies, including China, which complain that the Fed is contributing to asset bubbles around the world?

The real question we have to ask is why FOMC policy is affecting asset prices abroad: The answer is that the Asian economies competitively intervene in their exchange markets to manipulate the value of their currencies! As a result, they cannot have independent central banks. They are, therefore, importing U.S. monetary policy. Is that policy right for them? Hell no!

How should the FOMC respond to these countries? The Committee should say: You have no one to blame but yourselves. Hasn’t the U.S. government already advised you to float your currencies and not intervene? With respect to China, by the way, wouldn’t an appreciation of the renminbi be just what the doctor ordered? Isn’t just what’s needed to restrain inflation and aggregate demand?

What should Asia be saying to the Fed? Thank you! Please keep the U.S. economy out of a recession that could greatly threaten the global recovery.

Over at New Geography, Joel Kotkin writes about 10 cities best poised to do well post great recession. Interestingly Mungo-land (Raleigh-Durham) and Angus-topia (OKC) are on the list.

Here's what Joel says about the OKC:

During the Great Depression, it was Oklahomans who moved to California to escape the Dust Bowl. Now there are considerably more people moving from California to Oklahoma than the other way around....And Oklahoma City—which enjoys low unemployment as a result of its steadily growing energy and aerospace sectors—has been ranked among the best job markets for young people, ahead of Dallas, Seattle, and even New York (having Kevin Durant lead the NBA’s Oklahoma City Thunder for the foreseeable future can only improve the buzz).

Of course, none of the cities in our list competes right now with New York, Chicago, or L.A. in terms of art, culture, and urban amenities, which tend to get noticed by journalists and casual travelers. But once upon a time, all those great cities were also seen as cultural backwaters. And in the coming decades, as more people move in and open restaurants, museums, and sports arenas, who’s to say Oklahoma City can’t be Oz?

In a similar vein to Mungo's post below, a new paper from the Center for Global Development (downloadable here) reckons that the most cost effective way to reduce carbon emissions in developing countries is to have there be less people in developing countries!

They don't quite put it like that; they say the policies of "family planning and female education" are the biggest bang per buck, but both common sense and a reading of the paper show that what these policies do to reduce emissions is reduce the number of people.

KPC BFF Will Wilkinson writes a useful article on the idiot docility of the American public: the government says it needs to rub its hands on our tingly bits, so it must be necessary, line up, don't make trouble!

Some time ago, I tried to come up with the best explanation I could think of on the positive side: costly signals.

But that doesn't really explain our long term acceptance of this pointless abuse. Especially since a guy can get on a plane after his dad calls to warn authorities, and then all they want to do is "interview" him after the plane lands.

Here's one I don't get: I was waiting to pick up Tyler C., at the RDU airport. I was told I could not leave the car for even 30 seconds. I could wait in the parked car for three minutes, and then I had to circle the airport and come back. I did that three times. May I ask you: Why? There has never, ever been an attack on an airport, from the outside. Is the reasoning that there were some attacks during flights, flights imply airplanes, airplanes land at airports, and my car was parked at an airport? The drop-off lane where I was meeting Tyler was empty, no people around except me and the cop; no terrorist would pick that place for bomb attack. As we know, it is easy to drive a truck full of explosives to Times Square, or some other densely populated area, yet there is no security there at all. (Nor should there be, given the odds of an attack are still pretty much zero).

So why do the airport cops outside, and the TSA inside, make us jump and dance and obey? Because they can, folks. Because they can. And we all just say, "Please! Sir! May I have another!"

Boiled down: Kill yourself, or at least live in a way that makes you wish you COULD kill yourself. Problem is those greenhouse gases when you fire that bullet into the roof of your mouth: bad for the environment.

And I have to second Angus' "Shrub=FAIL" post. Check this graph, of Debt as % of GDP: (click for more bodacious image!)We have had exactly ONE fiscally conservative prez in the last 30 years, and his name was...CLINTON. Sorry, Repubs: you all suck!

(Debt=publicly held debt + intergovernmental debt; no way do you get to ignore T-bonds that happen to be held by the Soc Sec Trust Fund. If SSTF gets to count the bond as an asset, then that is a big honking debt on the government balance sheet. And I got the pic by taking a Nat Post graph and making it a ppt slide, so I could add the notations)

Shrub has written a book and is out on a media tour promoting it. Among the strange notions the book contains is the argument that GW Bush was a fiscal conservative! His evidence is a chart showing that Federal spending as a % of GDP was lower during his Presidency that it was during Clinton's, Daddy B's, or even Reagan's.

FAIL!

Presidents do not inherit a blank slate on spending. They start where the previous administration left off. Here's a graph of Federal spending since 1980:

(click on pic for a more glorious image)

As can be seen, under Reagan spending fell by a couple percentage points, under Clinton it fell considerably more, but the Bush train only goes one direction: UP! To the tune of around 2.5 percentage points of GDP!

Wednesday, November 10, 2010

Governors of 35 states have filed suit against the Federal Government for imposing unlawful burdens upon them. It only takes 38 (of the 50) States to convene a Constitutional Convention. This will take less than thirty seconds to read. If you agree, please pass it on. This is an idea that we should address.

For too long we have been too complacent about the workings of Congress. Many citizens had no idea that members of Congress could retire with the same pay after only one term, that they specifically exempted themselves from many of the laws they have passed (such as being exempt from any fear of prosecution for sexual harassment) while ordinary citizens must live under those laws. The latest is to exempt themselves from the Healthcare Reform that passed... in all of its forms. Somehow, that doesn't seem logical. We do not have an elite that is above the law. I truly don't care if they are Democrat, Republican, Independent or whatever. The self-serving must stop.

If each person that receives this will forward it on to 20 people, in three days, most people in The United States of America will have the message. This is one proposal that really should be passed around.

Proposed 28th Amendment to the United States Constitution: "Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators and/or Representatives; and, Congress shall make no law that applies to the Senators and/or Representatives that does not apply equally to the citizens of the United States ."

I feel weird when I link to blogs far more popular than KPC. Most of our readers probably already follow Tyler and Interfluidity. But they both have excellent posts up about our current economic situation and the policy options we face. You people should read these posts so I am linking to them here.

Still, QEII may do some good. Money matters, even if we don't always understand how or why, and excessively tight money has never done market-oriented economics any favors. Think of QEII as a make-up for some earlier monetary policy mistakes. Some of the relevant alternatives include a trade war with China or direct government employment of the unemployed and with what endgame? QEII is not some terrifying burst of potential hyperinflation.

But the thing is, human affairs are a morality play, and economics, if it is to be useful at all, must be an account of human affairs. I have my share of disagreements with both Krugman and DeLong, but on balance I view them as smart, well-meaning people who would do more good than harm if they had greater influence over policy. But they won’t, and they can’t, and they shouldn’t, if they exempt themselves from the moral fray. One of the stereotyped insults economists throw at one another is that a piece of analysis is “partial equilibrium”. The phrase is shorthand for coming to a conclusion based on assumptions that could not survive the circumstances under which the conclusion would obtain. I don’t want to single out Krugman and DeLong, but technocratic economists in general engage in partial equilibrium social science when they ignore moral concerns and the constraints “legitimacy” places on feasible policy.

I would add to the last sentence above that it's also problematic to ignore political constraints as well.

"He (Cook) had blood running down his leg and he asked me if I just saw a guy running and I said 'Ya' and he was like 'He just shot me,'" Schram said. "I asked him if he needed to sit down and he said 'No, it didn't burn as bad as I thought it would' and I was like, 'Dude you just got shot and he sat down and made a joke and said 'At least it didn't hit my balls.'"

I know this guy is an OSU Cowboy but all I can think to say right now is Boomer Sooner!

(B) Then, when an expansionary policy get proposed or enacted, pitch a fit and say that it's way too small and will never work.

(C) When said policy doesn't work (which of course could well be because the policy is bogus) scream "I told you so" over and over at the top of your lungs.

Was the "problem" with the stimulus bill simply that it was too small as Paul claims? Or was it that a temporary burst of government spending no matter how large is not going to come close to curing an economy that is suffering from a severe real shock/wealth loss?

One thing that's for sure as a matter of simple logic is that the fact that Paul said "it's too small", doesn't prove at all that's why if failed. Yet people (and Paul) often act as if it does.

Now he's pulled the same gambit with QE II, a policy that's unlikely to "work" no matter what size is chosen.

Guy writing book on pessimism. Has pinched nerve. Turns out it was a tumor. On Jon Stewart. (Nod to Angry Alex)

The Monster from Jekyll Island: It was Neanderbill! He was there! (This time, I mean; he went to the conference). And he got quoted in the NYTimes. I carpool with a famous person. You can tell other people you know me. (Nod to Anonyman)

Sunday, November 07, 2010

The front page of today's NY Times sings a new verse to a familiar tune. The Federal government actively helps market extra fatty pizza (Uncle Sam the Cheese Pusher) while at the same time putting out publications warning people against eating pizza.

Just like when it subsidized the production of tobacco while running advertising campaigns against consuming it.

Just like how it limits the importation of sugar and subsidizes the production of corn so that kids grow up swimming in an post-natal amniotic fluid of high fructose corn syrup, while at the same time good old uncle sam leads the fight against childhood obesity and diabetes.

We pay for the pusher and we pay for the preacher and they are one in the same.